Hometown Love Donations: Q1 Fundraising Drops 16.4%, Interior Ministry Cites 'Base Effect'

Fundraising for Hometown Love Donations in the first quarter of this year totaled 15.3 billion won, a 16.2% decrease compared to the same period last year. This marks the first quarterly decline since the Hometown Love Donation system was introduced in 2023.

The Ministry of the Interior and Safety attributed the relative drop in this year's figures to a high base effect last year, driven by exceptional fundraising activities by municipalities affected by wildfires. The ministry explained that the collection of 18.4 billion won in March to April last year, with eight cities and counties designated as special disaster areas participating due to a large wildfire in the Yeongnam region in March, created a sort of optical illusion. Excluding the wildfire-affected municipalities from last year's figures, Q1 fundraising this year actually saw an increase of approximately 1.4 billion won compared to the same period last year.

Despite efforts to improve the system, such as expanding the tax credit rate for donations exceeding 100,000 won up to 200,000 won from 16.5% to 44%, concerns have been raised that these measures have not translated into increased fundraising, even with efforts to mitigate the concentration of donations at year-end and reduce public interest decline.

Pointing out the system's limitations, some have called for bold institutional reforms, similar to Japan's regional donation market, to combat regional depopulation. Specifically, suggestions include expanding the full tax credit limit from 100,000 won to 200,000-300,000 won and considering the allowance of corporate donations. The Ministry of the Interior and Safety stated it is reviewing various options regarding corporate donations and continuously conveying the need for expanded tax credit benefits to the Ministry of Economy and Finance.